Markets are consolidating after last week’s last minute appreciation of the USD and will be looking to today’s data for confirmation of one direction or the other.
The UK Net Lending figure will show whether banks have tightened their purses and/or whether individuals have chosen to not take on any new debt on. This is made more important by the Brexit vote, which will have markets jittery as the full impact of the vote is yet unknown and both businesses and individuals tread cautiously. Should the figure be better than expected, the GBP will react favorably as banks and individuals show a vote of confidence in the new path for the UK while worse than expected data will see the GBP depreciate as markets price in the increased uncertainty.
The US will see the release of the CB consumer Confidence figure, which is a leading indicator of the all-important consumer spending. At the end of the day it is consumers that make the wheels of an economy go round and a higher level of confidence in current economic conditions will see consumer spending rise as consumers feel more certain of tomorrow and hence more comfortable in spending money today, which will bode well for the USD as we see it continue to strengthen off of last week’s lows. Worse than expected data will see the dollar give back some of last week’s gains as trader’s retreat and wait for more data.
Today’s key economic data is as follows:
- Net Lending to Individuals m/m expected at 4.9B
- Current Account expected at -20.6B
- RMPI m/m expected at -1.3%
- CB Consumer Confidence expected at 97.2
- RBA Assist Gov Debbelle Speaks
- ANZ Business Confidence previously at 16